Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>In this report, we review our IPO investment research in 2021, including the performance of our calls.</li>
<li>We made 37 investment calls on IPOs this year, of which 28 had positive ratings on the IPOs and 9 had negative ratings.</li>
<li>The 28 stocks (positive ratings) were up 26.1% on average from their IPO prices. The 9 stocks (negative ratings) were up only 4.9% on average from their IPO prices.</li>
</ul>


In this report, we review our IPO investment research in 2021, including the performance of our calls.
We made 37 investment calls on IPOs this year, of which 28 had positive ratings on the IPOs and 9 had negative ratings.
The 28 stocks (positive ratings) were up 26.1% on average from their IPO prices. The 9 stocks (negative ratings) were up only 4.9% on average from their IPO prices.


Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.</li>
<li>So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.</li>
<li>Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.</li>
</ul>


KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.
So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.
Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.


KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

LG Energy Solution / Equity Capital Markets

<ul>
<li>LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. The IPO price is from 257,000 won to 300,000 won. </li>
<li>The IPO base deal size is from $9.3 billion to $10.8 billion. This is the biggest ever IPO in Korea. </li>
<li>The bankers used CATL and Samsung SDI as its comps. Using their annualized EBITDA in 2021, the average EV/EBITDA of its peers is 51.4x (2021E). </li>
</ul>


LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. The IPO price is from 257,000 won to 300,000 won. 
The IPO base deal size is from $9.3 billion to $10.8 billion. This is the biggest ever IPO in Korea. 
The bankers used CATL and Samsung SDI as its comps. Using their annualized EBITDA in 2021, the average EV/EBITDA of its peers is 51.4x (2021E). 


<ul>
<li>The upcoming rebalancing should feature<strong> a total of 12 constituents having a ±5%p free float change</strong>: eight members with +5%p or greater and four members with -5%p or harsher.</li>
<li>It seems better to outright trade individual liquidity-rich stocks: <strong>SK Bioscience, SKIET, Kakao Bank, and Krafton</strong>.</li>
<li>Considering that SKIET's recent share price correction was severe, we may want to take a relatively long trading window for SKIET while taking a tighter approach to the rest.</li>
</ul>


The upcoming rebalancing should feature a total of 12 constituents having a ±5%p free float change: eight members with +5%p or greater and four members with -5%p or harsher.
It seems better to outright trade individual liquidity-rich stocks: SK Bioscience, SKIET, Kakao Bank, and Krafton.
Considering that SKIET's recent share price correction was severe, we may want to take a relatively long trading window for SKIET while taking a tighter approach to the rest.


KOSPI 200 December Rebalancing: Constituents with a Substantial Free Float Change

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Krafton posted relatively strong numbers for its 3Q with both revenue and OP above sellside estimates.</li>
<li>The analyst questions predictably focused on potential cannibalisation by PUBG New State and of course the metaverse. LOL</li>
<li>With New State having various issues at launch though that may be the least of Krafton's worries.</li>
</ul>


Krafton posted relatively strong numbers for its 3Q with both revenue and OP above sellside estimates.
The analyst questions predictably focused on potential cannibalisation by PUBG New State and of course the metaverse. LOL
With New State having various issues at launch though that may be the least of Krafton's worries.


South Korea

Krafton, Inc. operates as a game development company. The Company develops console games, mobile games, computer games, and other related products. Krafton markets its products throughout South Korea.

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Krafton (259960 KS)

Review of Our IPO Research in 2021

We review our IPO investment research in 2021. The 28 stocks (positive ratings) were up 26.1% (average) from IPO prices. The 9 stocks (negative...

Douglas Kim

KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

Kakao Pay eventually received a 35% float rate, meaning that KRX has included all of Alipay's non-locked stake in the float.

Sanghyun Park

LG Energy Solution IPO Preview

LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. This is the biggest ever IPO in Korea.

Douglas Kim

KOSPI 200 December Rebalancing: Constituents with a Substantial Free Float Change

KOSPI 200 rebalancing next month should feature a total of 12 constituents having a ±5%p free float change: eight members with +5%p or greater and...

Sanghyun Park

Krafton – A Beat… Or Is It?

Analyst questions for Krafton at 3Q predictably focused on potential cannibalisation by PUBG New State and of course the metaverse. LOL.

Mio Kato

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